High margins and light punishments attract criminals who produce and distribute fake drugs.  Counterfeiters scrimp on production costs by using alternate or no active ingredients that are brewed up in unclean labs, and they “up-label” asserting a higher potency or stolen pedigree.  In 2005, drug counterfeiters grossed $32B and by 2010 that had risen to $75B

In most cases, retail buyers of counterfeit drugs are trying to obtain lifestyle drugs (e.g. opioids or stimulants) without a valid prescription, or they are trying to avoid high prices of filling a prescription domestically (e.g., $18 for genuine Viagra versus $1.10 for fake Viagra).  There are also wholesalers of fake drugs and precursor chemicals, but that’s a more complex subject.

Retail purchases of counterfeit drugs are almost always conducted over the internet,  then shipped by UPS or FedEx.  Less than 1% of counterfeits are US-made.  Most of the fake-sellers tout Canada as their base.  But of those “Canadian” sites, about half have no presence in Canada and are located in and ship product from China, India, or Africa.   In Africa, 70% of drugs on the market are fakes of one kind or another.   Some countries with a big stake in generic pharmaceutical manufacturing have the gall to claim that counterfeit is really just a low grade of “generic” that “Big Pharma” vilifies for competitive reasons.   

Spotting a counterfeit drug is sometimes easy (shoddy packaging, misspelled wording, wrong shape/color of product), but sometimes it is impossible for a retail buyer to detect a fake by inspection.

Ingredient substitution, impurities, branding fakes, and dosage deceptions can lead to ill health, death, and financial loss for consumers.  These serious consequences deserve related efforts to rein-in fake drugs.  First, there’s sentiment supporting harsher effective sentencing of those caught in the fake-drug supply chain.  With parole, current penalties let criminals back on the street in a mere 6 months – far more lenient than for narcotics trafficking.  Secondly, there is some progress in detection technology, which usually harnesses RFID or number identifiers in packaging.  The identifier is scanned, transmitted and verified against a centralized database.   Presumably, a faked number or a valid number repeatedly offered for verification would both raise an alarm.  Penalties and detection technology alone will not staunch demand for lower drug prices.

Consumers will continue looking for affordable ways to fill prescriptions.  Legitimate Canadian pharmacies have worked for some and more will try that route as US healthcare costs skyrocket.  If Big Pharma finds consumers buying from Canada irksome, then it should stop forcing US consumers to subsidize foreign consumers —  those whose governments demand price concessions or who feign blindness toward their domestic counterfeiters’ activities.   

Alan Daley is a retired businessman living in Florida who follows public policy issues from a consumer’s perspective.